I was told recently that rotating the tires from side to side can cause them to separate, I have never heard this and since the curb side tires are taking quite a beating (I teach drivers ed) I could sure stanc to spread out the damage as much as possible to save the sidewalls from wearing out before the treads.

anyone ever hear this before or are these guys just trying to blow my tires as fast as possible to sell me more?

In the days of my misspent youth, before radial belted tires were widely available, the standard tire rotation was FL to RR, RR to RL, RL to FR, FR to FL (or something similar), rinse and repeat. This gave each tire equal time in each position. With the advent of radial tires, the only allowed rotation is FL to RL and FR to RR, so that the tires always stay on the same side of the vehicle they were originally installed on. I once foolishly ignored this rule and ended up having both of my rear tires suffer catastrophic blowouts within a few thousand miles. And they still had plenty of tread on them! I don't know the exact explanation for it, although I've been given a few different ones from various tire shops, but it has to do with the radial belting. Sorry I can't be more illuminating, but my memory is hazy and the explanations were weak.

One note, I have heard or read that newer radial tires can be rotated left-right, but I would get the tire manufacturer backing your warranty to confirm that.

Newer radial tire construction makes separation far less likely, and recommended rotation patterns are usually some form of cross pattern (assuming that you don't have directional tires). TireRack has guidance on their website about permissible rotation schemes, including:

When I was home last weekend, I put new tires on my car. It'll be hard to cross-rotate them, since the tread pattern is decidedly directional. (Michelin Hydroedge FWIW), whether they're bias or radial.